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Philippine manufacturing

The decline in Philippine manufacturing output in December was the 13th straight monthly dip. Image by Mike Flynn from Pixabay

The Philippine manufacturing sector recorded its 13th consecutive month of decline in December 2019, according to the Philippine Statistics Authority (PSA).

Based on preliminary result of PSA’s Monthly Integrated Survey of Selected Industries, the Volume of Production Index (VoPI) decreased 10.1% in December 2019, more than the 9.3% decline in December 2018.

The Value of Production Index (VaPI) fell 9.5% in December 2019, also more than the 9.1% dip in the same month in 2018.

With both indices remaining in negative territory for the 12 months of 2019, the full-year decline was recorded at 8.6% for VoPI and 7.1% for VaPI. This reversed the positive growth of manufacturing that was recorded in 2018.

Petroleum products and basic metals, with a 47.9% decrease, contributed largely to the drop of VoPI in December 2019. Two other major industries that registered two-digit dips in VoPI were furniture and fixtures (-30.4%) and miscellaneous manufactures (-10.5%).

The decline in VaPI, meanwhile, was mainly influenced by decreases in the indices of nine major industry groups led by basic metals (-50.6%), petroleum products (-48.8%) and textiles (-11.9%).

The National Economic and Development Authority said government should continue supporting initiatives towards digital solutions in the private sector to boost manufacturing growth and bounce back from its decline in 2019.

“We encourage industries to capitalize on innovation to reach their growth potential in this era of the Fourth Industrial Revolution. To this end, the government needs to formulate and implement policies and programs to stimulate innovation in the country,” Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement.

Building capacity of the workforce and embedding innovation in training are also crucial to meet technical and emerging market demands, he said.

“The Philippines also needs to improve its reputation concerning intellectual property protection. This will attract foreign companies to locate sensitive technologies and product operations in the country,” the Cabinet official added.

He said these will allow the country to expand from the production of basic products and commodities to higher value intermediate and specialty products for domestic and export purposes.

“To support manufacturing growth, there is a need to strengthen the transport and logistics sectors by building quality and climate-resilient infrastructure. In this regard, a proposed bill to amend the Contractor’s License Law will open up the country’s construction sector to eligible and qualified domestic and foreign contractors,” Pernia pointed out.

He said encouraging Association of South East Asian Nations regional cooperation to embark on potential regional infrastructure projects will allow the Philippines to maximize benefits from trade and deepened regional integration.

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